Highlights of this Update:
- Call to schedule your personal review today!
- Deadline for filing return or extension for 2016 income tax is April 18, 206
- Stocks start first half of April slightly lower, interest rate dip.
- A disconnect between Consumer Confidence and retail sales.
READ ON FOR FURTHER DETALS………………………………………
Schedule Your Personal Review for This Quarter:
This is a great time to review your long-term plan and discuss any changes you would like to make. This quarter we will also focus on assisting you in reviewing your current estate plan and see if it is current and in line with your goals for distribution to heirs and loved ones. If you have not yet done so, call today to set up your personal review, either in person or by phone. We also now have the option of a video conference via Go-to-Meeting if you can’t make it to our offices. Just let us know what works best for you. Call 405-844-9826 to schedule your review time.
Tax Deadline April 18th:
The deadline to file your 2016 income tax return or for filing an extension is Tuesday, April 18th. 2016 IRA contributions must be made by the filing deadline, even if you file for an extension.
Last week saw the major U.S. stock indices move lower over geo-political concerns with North Korea, Syria, and Russia. Add to that the dropping of the largest non-nuclear bomb by the U.S. in Pakistan, uncertainty dictated most of the week’s news headlines. However, after today’s .90% gain for the Dow Jones Industrial Average, much of last week’s decline has already been recovered. The Dow gained 180.67 today, closing at 20,636.92. For the year to date, the Dow is now up 4.43%. The Standard & Poor’s 500 stock index is now 4.92% higher for 2016 after today’s close. (Google Finance)
Interest rates have continued to ease some since the first of this year. The yield for the 10 year U.S. Treasury ended today at 2.249% compared with 2.45% at the start of 2016. (MarketWatch) The average rate for a 30-year fixed mortgage now stands at 3.87% while the 15-year fixed rate is now 3.05%. (Bankrate.com)
We have made some adjustments to our fixed income/bond holdings over the past several weeks, and so far, this has benefited client portfolios with the decrease in current interest rates. We also plan to make some additional adjustments in the coming weeks by reducing exposure to equities/stocks in our mutual fund holdings and add funds to the pure fixed income category. This will position portfolios in a more cautionary mode from the present allocations once the changes are complete. We will continue to monitor the markets and make changes when warranted. We will keep you posted.
A Disconnect in Consumer Confidence
A disconnect – that’s exactly what we’re seeing when we compare the sharp rise in consumer confidence with a lackluster retail sales report released last Friday.
Led by a 1.2% drop in auto sales, the Commerce Department reported that retail sales fell 0.2% in March. Pull out the volatile auto sales category and sales were unchanged for the second month in a row. If you take it one step further and remove sales at gas stations, which helps to filter out changes in gasoline prices, so-called ‘core sales’ were up just 0.2%.
So, what is happening? Hasn’t consumer confidence surged since the election? If consumers are feeling so much better, shouldn’t this be reflected in spending, not just consumer confidence? It’s a good question, but it’s one that doesn’t have an easy answer.
One explanation may simply be a statistical anomaly in the first quarter. An analysis by CNBC and the Federal Reserve Bank of San Francisco showed that the first quarter has historically been much weaker than the remainder of the year. Some economists blame first quarter weakness on statistical anomalies associated with adjusting the data for seasonality.
Another possible explanation: consumers are saying one thing in consumer confidence surveys but are responding differently at the mall. Whatever the explanation, we’re likely to continue to see gains in spending, even if the pace is uneven. At the present time, we don’t see a recession for the U.S. in the near term.
We hope you all had a great Easter weekend and were able to enjoy some extra time with family. We appreciate the privilege to be of serve and look forward to working with you in the years to come.
Your TEAM at F.I.G. Financial Advisory Services, Inc.
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1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
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